Leaders look to remake IMF, World Bank
Developing nations seek aid for climate havoc
PARIS — An unusual, guarded optimism has descended upon Paris, as well as hundreds of world leaders, bankers, and climate activists. They have come for a two-day conference billed as the new Bretton Woods.
The reference is to the 1944 gathering in New Hampshire where diplomats hammered out the monetary institutions to rebuild countries after World War II — the World Bank and the International Monetary Fund. Now, the goal is to rebuild those systems to weather a looming crisis: the entwined dangers of poverty and climate change.
“We don’t have to choose between the fight against poverty and the fight for the climate and biodiversity,” President Emmanuel Macron of France argued last year.
Many believe a new international monetary system, one that offers developing countries facing climate crises financial support rather than more crippling debt, might be in the works.
On Wednesday, on the eve of the conference, 13 world leaders, among them President Biden, published a public letter in about 40 newspapers, including Le Monde, saying they were determined “to forge a new global consensus” and that the summit would stand out as a “decisive political moment.”
There is also trepidation. Some worry that the conference could prove to be another grand summit held by a leader who loves his self-appointed role as a multilateral consensus builder and disrupter — but does not always deliver results.
“The French president has a taste for international initiatives, except it’s been more than six years now that he’s been president, and he’s exhausted energy and trust,” said Cécile Duflot, director general of the poverty-fighting group Oxfam in France. The summit, she said, should result in concrete promises of debt relief and not just “chitchatting.”
“When you have 62 countries today that are paying more on debt payments than on health care, it’s obvious that we are in a dysfunctional system,” Duflot said.
The conference grew out of the ideas not of Macron but of Prime Minister Mia Mottley of Barbados.
In November, Mottley sketched out a proposal for financial reform from the stage of the United Nations climate change summit, known as COP27, in Sharm el-Sheikh, Egypt. She and her team called it the Bridgetown Initiative.
Mottley described the financial systems created threequarters of a century ago as “imperial,” set up as they were before many countries in the world had become independent. She called for a major overhaul so developing countries most prone to climate change disaster — and already facing debt crises — could access capital to address poverty and damage, and to pay for their transition to a green economy.
“Yes, it is time for us to revisit Bretton Woods,” she said.
The response was resounding, if unexpected: Kristalina Georgieva, the head of the IMF, endorsed the need for reforms. Biden’s special envoy for climate, John Kerry, announced that he, too, was on board. So did the CEO of Bank of America.
Macron, who already hosted international summits on biodiversity, the protection of oceans and forests, was also effusive. The project seemed a natural fit for the president of the country that hosted the Paris climate agreement, and he soon announced a summit in Paris to make headway on some of the proposals.
On the agenda are many things Mottley has called for: using public money to leverage large-scale private investment for developing countries, increasing those countries’ access to financial support from the IMF, and allowing countries to pause payments on international loans after climate-related disasters.
German Chancellor Olaf Scholz and Chinese Premier Li Qiang will be among the attendees. So will Treasury Secretary Janet Yellen.
“In the eight years I’ve been campaigning, there has never been anything like this — these kinds of heads of state with the political will to do a deep reform of the architecture of international finance,” said Daniel Boese, a campaigner with the advocacy group Avaaz.